Hi Katie,

How much of the customer deposits are allocated to purchasing products, overhead, and marketing? Is there a way to break it down? 

If you’ve been putting off organizing your books, now’s the time to get things in order. Tax deadlines are approaching, and a little effort now can save you hours of stress later.

Whether you’re behind or just a little messy, this step-by-step checklist will help you get your bookkeeping in shape so you can file confidently and maybe even find a few extra deductions along the way.

1. Record All Income

Start by making sure all incoming payments are properly entered in your books. This includes:

• Deposits from Stripe, Square, or PayPal
• Checks or cash deposits
• Late or backdated invoices

If you’re using invoicing software or QuickBooks, double-check that nothing has been left in draft or incorrectly marked unpaid.

2. Enter All Outstanding Expenses

Ensure that every business-related expense is in your bookkeeping system. Look through:

• Bank and credit card statements
• Receipts in your inbox or apps
• Monthly subscriptions and software fees

Missing expenses can throw off your tax deductions, so now’s the time to get them in!

3. Categorize Transactions Accurately

Now that everything is entered, assign accurate categories to each transaction. Focus especially on:

• Office expenses
• Subscriptions
• Meals and travel
• Contractor payments
• Owner’s draws and personal expenses (mark these clearly as personal)

4. Check for Duplicates and Errors

Before you reconcile, do a quick review of your books to spot anything that looks off. Common issues include:

• Duplicate transactions
• Mistakes in payment amounts
• Wrong dates or vendor names

You want your books to be as accurate as possible before moving on to reconciliation.

5. Reconcile Bank and Credit Card Accounts

Once everything’s entered and categorized, reconcile your accounts to match your bank and credit card statements. This helps ensure your books reflect the actual cash flow of your business.

If you’re in QuickBooks, their reconciliation tool makes this part a lot easier.

6. Review Owner Contributions and Draws

If you’re a sole proprietor or single-member LLC, keep track of any money you’ve invested into or withdrawn from the business. These aren’t expenses but do impact your equity.

Double-check these are logged correctly in your system and not mixed in with income or expenses.

7. Generate a Year-End Profit & Loss Statement

With everything cleaned up, run your Profit & Loss report to get a clear picture of your financials. This is the key document you’ll need for tax filing.

Review it for:

• Accuracy of income and expense totals
• Proper categorization
• Anything unusual that might need a second look

8. Back Up Your Records

Don’t forget to save everything. Download your year-end reports and back up receipts and important documentation in one place, ideally both digitally and in the cloud.

Need Support?

Feeling stuck or overwhelmed? You don’t have to do this alone.

If your books need to be cleaned up before tax time, my QuickBooks Diagnostic & Cleanup service is a great place to start.

And if you’re looking for ongoing support after cleanup, you can explore monthly bookkeeping services for small businesses as well.